’09 brings challenges for health care

Local health-care organizations will continue to battle with increased demand for services and decreased financial stability well into 2009.

Melissa Westphal

Health-care organizations will continue to battle with increased demand for services and decreased financial stability well into 2009.

Health-care workers in Boone and Winnebago counties earned more than $1 billion in 2007, according to data released this week from the U.S. Department of Commerce’s Bureau of Economic Analysis. The local health-care payroll has increased 37 percent since 2001.

At the same time, health-care groups are faced with unique financial challenges magnified by the recent recession and increased cost of care.

Rockford Health System and Advocate Health Care, the state’s largest health-care provider, entered merger talks during the first week of December. Both groups have committed to talk for 120 days, taking them through April.

Mergers and acquisitions have become attractive plans for nonprofit hospitals, according to Moody’s Investors Service, to offer better access to capital.

Crusader Clinic changed its name to Crusader Community Health this year to reflect its broader reach of service, including the increased load of patients who have lost employer-based health insurance.

Crusader’s patients in 2009 will see a new electronic health record system, new providers and a new prescription drug program for its sliding-scale patients.

SwedishAmerican Health System is tightening its spending heading into 2009 by trimming overtime and capital spending, and the leadership team, which includes CEOs and vice presidents, is taking a 5 percent salary reduction from January to May.

“Health care in the past has been somewhat immune to economic downturn, but with the current recession, nobody has been unaffected,” said Don Haring, vice president of finance for SwedishAmerican Health System.

Several expansion projects approved and financed before the economy turned sour will see progress in early 2009. SwedishAmerican is completing a $20 million renovation of the old Highland Hospital in Belvidere, and OSF Saint Anthony Medical Center will open its Center for Health-Rock Cut during the first week of January.

Rockford Health Physicians, part of Rockford Health System, is expanding its clinic in Winnebago to meet the increased need of the village’s growing population. The expansion is expected to be finished by May 1 or sooner.

The University of Illinois College of Medicine at Rockford enters its second phase of construction on a new pharmacy school next year and will begin accepting applications for the inaugural 2010 class by summer.

College Dean Martin Lipsky said it’s a challenging time for the organization, which is expected to face a mid-year budget rescission of 8 percent, which means a loss of about $600,000 in state funding. Lipsky said leaders are aggressively pursuing grants and new contracts.

“We’re not going to sit still, though,” Lipsky said. “We still plan to look at ways of meeting and enhancing ways of meeting our mission.”

The college is looking to bring in new researchers in the areas of infectious disease and cancer, regionalize the cancer center in Rockford with an emphasis on cancer prevention strategies and unveil an electronic records system.

Health-care organizations will be tested financially for the next several years, said John Frana, president of theFranaGroup, a Rockford-based health-care consulting firm.

Moody’s Investors Service said this month that each of the main health-care sectors — including nonprofit and for-profit hospitals — has a negative outlook for the coming year, driven by the economic downturn.

“Most of them, if they can stay financially flat, they’ll probably be very happy,” Frana said of the local health-care systems.

Melissa Westphal can be reached at (815) 987-1341 or mwestpha@rrstar.com.

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